Dollar rises, euro steady – złoty under pressure from global shifts
The dollar is gaining, but the złoty remains calm
The global strengthening of the U.S. dollar has so far not caused any clearly negative effects on the złoty market. The euro rate has remained in a springtime sideways trend, and the other major pairs involving the złoty have also stayed within narrow trading ranges.
As PKO BP analysts noted, emerging-market currencies have begun to feel the weight of the global strengthening of the dollar, supported by rising recent pricing of the probability of a Fed rate hike. In practice, this means the market is counting less and less on quick rate cuts in the U.S. and is increasingly factoring in a scenario of a more restrictive monetary policy.
EUR/USD under pressure after breaking below 1,17
The EUR/USD rate clearly fell below 1,17 and dropped to its lowest level in a month. This is an important signal for the market, because the euro-dollar pair often sets the direction for other currencies in the region, including the złoty.
The futures market, the part of the financial market where investors arrange transactions ahead of time, is increasingly pricing in a rate hike by the Federal Reserve rather than the cuts that were expected not long ago. This shift in sentiment pushed the dollar higher and lifted USD/PLN to 3,6489 zł. On Friday morning, the dollar was 1,2 grosz more expensive than a day earlier.
USD/PLN still in a narrow range
Despite the recent rise, USD/PLN remains within a relatively narrow range of 3,60-3,65 zł, which has held for a month. This setup shows that the market remains cautious and is not yet responding to the dollar’s strength with a sharp weakening of the złoty.
It is also worth noting that a more expensive dollar has not led to a weaker domestic currency against the euro. The złoty is therefore behaving selectively: it is losing ground against the U.S. currency, but remains stable against the common currency.
The euro little changed
The euro rate stood at 4,2469 zł and showed little movement. Since the beginning of March, that is, since the outbreak of the war in the Middle East, EUR/PLN has been trading in a range of 4,2250-4,3070 zł. This kind of stability suggests that the market is waiting for new impulses that could push the rate out of this band.
In April and May, the euro-to-złoty rate twice came close to the lower edge of this consolidation, but without a successful attempt to break out decisively. According to PKO BP experts, EUR/PLN may continue to hold within 4,23-4,26, while USD/PLN faces the risk of moving toward the 3,66-3,68 zone.
CPI inflation did not change the market picture
The release of final April CPI inflation data, which rose to 3,2%, had no significant impact on the złoty’s performance. Data from Poland’s statistics office, GUS, already show that inflationary pressure linked to the fuel market is beginning to spread through a wider part of the economy.
This, in turn, increases the likelihood of interest-rate hikes that the market is starting to more clearly assign to the NBP. For the złoty, that means potential support in the medium term, although so far this has not translated into a stronger move in exchange rates.
The Swiss franc and the pound remain in a sideways trend
The Swiss franc also continued its springtime sideways trend. On Friday morning, the franc was priced at 4,6476 zł, or 0,6 grosz more than on Thursday. Despite this small increase, CHF/PLN remains calm and shows no sign of a more decisive breakout.
The franc has been moving in a range of 4,60-4,65 zł since the beginning of April. A similar picture is visible in GBP/PLN, which has stayed in a sideways trend within 4,85-4,95 zł since the beginning of March. This means that the British currency is also not providing a stronger impulse for moves in the złoty market right now.
On Friday, the pound was valued at 4,8769 zł, after falling by 2,5 grosz the day before. For now, both the franc and the pound remain in a calm, limited range, and the złoty is not moving beyond its well-known trading bands.
What it means for currency exchangers
For people buying euros, dollars, francs or pounds, the key takeaway is simple: the złoty remains stable, but the pressure from a stronger dollar is becoming more visible. If global expectations for the Fed continue to shift toward higher interest rates, the dollar may maintain its advantage over other currencies.
From the perspective of everyday currency market users, this means gradual changes rather than sharp swings. For now, EUR/PLN, USD/PLN, CHF/PLN and GBP/PLN remain within ranges the market has known for several weeks, and the next moves will depend mainly on macroeconomic data and central bank communications.
Sources
- Current exchange rates: National Bank of Poland (average exchange rate table)
